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Some of Sydney CBD’s most popular office buildings are now being eyed off by keen-eyed investors who are looking to create residential transformations, according to two commercial agents.
Colliers’ executive for Sydney CBD sales, Angus Windred, and national director of Asia markets Joseph Lin have revealed strategic buyers are now looking to undertake possible residential transformations in inner-city office suites.
It comes as office markets are already seeing increasingly high demand.
Mr Windred and Mr Lin said the trend is being driven by the recent premiums being paid by owner-occupiers in the residential space, particularly in Sydney, where limited residential stock is available.
That trend has led them to speculate that “it’s possible we could see parts of Sydney go the way of other global cities like New York, London and Hong Kong, where there is a greater mixed-use environment”.
According to them, a push for more mixed-use assets could be a boon – injecting “a new breed of investors to the Sydney CBD and metro strata markets”.
Mr Windred said he had seen an uptick in interest around potential rezoning opportunities.
“Due to the changing dynamics of the commercial landscape, buyers are ushering in a new era to ensure their assets have long-term stability. The ability to combine and/or structure usage as both an office headquarters or residential apartment in one has been seen very favourably by purchasers,” he highlighted.
That interest coincides with an increased appetite from many buyer classes for office space, which comes off the back of the NSW government’s acquisition of 180 strata suites as part of the new Metro West station.
This, in turn, will fuel heightened competition for limited stock.
Mr Lin said the past few months have seen “astute investors aggressively bidding for quality strata offices and retail shops so that they can be ahead of their upcoming competitors from compulsory acquisition”.
From his position, “it signifies another golden age for strata owners to capitalise upon their existing property holdings”.
Smart Property Investment has previously reported on the burgeoning popularity of “industrial lifestyle” – another example of mixed-use planning and development that’s gaining steam.